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Car Production Capacities Remain Unutilized

The worst doesn’t seem to be over as yet. The car makers in India are still feeling the brunt of credit crunch and are reeling under the pressure. Most of the production capacities remain unutilized in nearly every production plant in India. Major auto manufacturers like Maruti Suzuki India Limited and Hyundai Motors India Limited are still working on 60 percent of the production capacities but other mid-rung companies are hard hit.

Companies like Ford India, General Motors and Honda Siel Cars India are facing dire problems as their production capacities remain unutilized. Moreover, these companies cannot look up to their flagship companies back home as they are facing even more severe problems than the subsidiaries in India. The companies are now forced to rethink on their future strategies as their investments done in past three years lie idle. Nearly $5 billion investments were made by the auto makers of India towards their expansion plans.

The car market in India was expected to grow upto 2.5 million cars in FY 09-10 but has now been reduced by half million units due to impeding growth of the auto sector.

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